Daily Archives: January 21, 2013

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Woman claims she entered Wells Fargo ‘debt trap’

Woman claims she entered Wells Fargo ‘debt trap’

SAN FRANCISCO (KGO) — A coalition of consumer groups is asking the federal government to take a hard look at the lending practices of San Francisco-based Wells Fargo bank. They’re especially concerned about a program they claim is like a payday loan product. One woman compares her experience to a “debt trap.”

 

Wells Fargo prefers to call its program a Direct Deposit Advance. The charge is a $1.50 for every $20 borrowed. Your loan must be paid in full when your next paycheck arrives. So if you get paid every two weeks, the fee on the 14-day loan is the equivalent of an annual percentage rate of more than 180 percent. A 30 day loan is 91 percent.

Annette Smith of Rocklin in the Sacramento area needed to pay for smog repairs and registration on her truck. She didn’t have the money. So she went to her bank, Wells Fargo, and wouldn’t give her a traditional loan, but suggested instead she might want to utilize a Wells Fargo program called Direct Deposit Advance.

“I didn’t have to have collateral. I didn’t have to have a credit check and I felt that that was a good service, you know,” said Smith.

Wells Fargo let her borrow up to $500. The catch was she had to tie the loan to her monthly direct deposit from social security. As soon as her next check was deposited, Wells Fargo would automatically debit the full loan amount, plus a fee of $37.50.

“My only alternative was to borrow again,” said Smith.

I don’t know how much Smith makes every month, but her social security check is her only source of income, so that’s around $1,000. The loan amount was $500 and the fee was $37.50. That leaves her just $462.50 cents for food, rent and utilities for the rest of the month.

“You’re suddenly in a position where you can’t make your other expenses, you take out another loan and that cycle goes on and one and on,” said Andrea Luquetta with the California Reinvestment Coalition.

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Problem Solver helps homeowner to get $4,000 back on Bank of America mortgage

Problem Solver helps homeowner to get $4,000 back on Bank of America mortgage

It’s not like mortgage paperwork is easy to understand — even for the experts. But things got really confusing with the loan Kelly and Eli Moreno of Irving have with Bank of America.

The Morenos were told they needed to pay $15,000 to keep their home, but say they could not get a satisfactory answer as to why. So they contacted me after seeing a story about how I helped a couple, who got $91,000 back.

It turned out that there were mistakes by the homeowners and the bank, as I wrote here.

In the end the couple got about $4,000 back and won’t have to pay their mortgage until May. The bank said it also will drop any fees that were applied.

LAWSUIT: LAW OFFICE CHARGED ME TEN$ OF THOUSAND$ FOR FORECLOSURE DEFENSE, YET HAD ME FILE AS ‘PRO SE’ DEFENDANT

CHICAGO (CN) – A “foreclosure defense” office charged a client $41,000 for “filing fees” and charged her for filing her own legal work, telling her filing pro se would “give her an advantage” on appeal, the woman claims in court.

Lori Lappas sued Illinois Foreclosure Defense LLC and Innocent Obi, in Cook County Court. The brief, 4-page complaint contains a welter of alarming allegations.

Illinois Foreclosure Defense is “owned by two attorneys who provide legal services for clients,” the complaint states, and Obi is and was their employee.

The complaint does not state that Obi is an attorney, but Lappas says he was her “only contact” with the office.

She says she hired the defendants in January 2012 to represent her in two foreclosure cases.

“Lori Lappas paid Illinois Foreclosure defense in excess of $20,000 over the last 10 months,” the complaint states.

It adds: “That in addition to the defense of the two foreclosure lawsuits, Innocent Obi and Illinois ForeclosureDefense agreed to represent Lori Lappas in three additional lawsuits and represent her with yet a fourth matter with regard to issues with the Internal Revenue Service.

“That for each of the cases and the issue with the IRS, Ms. Lappas paid retainer fees to the Illinois ForeclosureDefense.

“That for each of these three additional lawsuits and with the representation Innocent Obi and IllinoisForeclosure Defense did no work and refuses to refund any of the retainers paid [by] Ms. Lappas.”

“That with respect to the original foreclosure cases Innocent Obi had, despite being paid as attorneys for Ms. Lappas, had Ms. Lappas file appeals as pro se defendant with Illinois Foreclosure Defense and Innocent Obi not only did the actual filing of the pro se filings but further cut and pasted Ms. Lappas’s signature without her authority.

“That with the pro se appeals, such appeals were prepared by Obi Innocent on behalf of Illinois ForeclosureDefense yet had Ms. Lappas file pro se and also had her pay retainer fees for those appeals.

“That Ms. Lappas was told that filing pro se would give her an advantage in the appellate court.

“That these appeals have not halted any prosecution of the foreclosure cases nor had any advantage to Ms. Lappas.”

To cap it off, Lappas says: “That before Ms. Lappas left town on October 23, 2012, Ms. Lappas left a blank signedcheck with Innocent Obi and Illinois Foreclosure Defense in order to pay any needed filing fees or her monthly $400 fee if she could not be reached.

“That upon her return Ms. Lappas found that Innocent Obi had written out the check for $41,000 to IllinoisForeclosure Defense; further noting that the check was written the same day Ms. Lappas left town on October 23, 2012.”

Lappas says she has repeatedly asked for “copies of all work completed by Illinois Foreclosure Defense,” but “was never given any copies.”

She seeks damages for fraud and breach of contract, and says her damages “include but are not limited to the loss of her homes.”

She is represented by Jeffrey Deer with Deer, Stone & Maya.

SOURCE: The Worst Law Office in the World?

DIANE HATHAWAY, MICHIGAN SUPREME COURT JUSTICE, CHARGED WITH FRAUD

DETROIT — Federal prosecutors have filed a fraud charge against Michigan Supreme Court Justice Diane Hathaway, just a few days before she leaves the state’s highest court in a scandal involving the sale of a Detroit-area home and suspicious steps taken to conceal property in Florida.

The charge was filed Friday as a criminal “information,” which means it was negotiated and that a guilty plea is expected in federal court. Defense attorney Steve Fishman declined to comment Saturday.

Hathaway is resigning Monday, months after a series of questionable real estate transactions first were revealed by a Detroit TV station. Hathaway and her husband, Michael Kingsley, deeded a Florida home to Kingsley’s daughter while trying to negotiate a short sale on a house they couldn’t afford in Grosse Pointe Park.

In a short sale, a bank agrees to a sale that wipes out any remaining mortgage, a significant benefit for any borrower. The 2011 deal went through and erased the couple’s $600,000 debt in Michigan. Five months later, in 2012, the debt-free Windermere, Fla., home worth more than $600,000 went back in their names for $10.

The bank fraud charge says Hathaway made false statements to ING Direct, transferred property to others and failed to disclose available cash – all in an effort to fool the bank into believing she had a severefinancial hardship. Kingsley, also a lawyer, has not been charged.

Rest here…